What are Scopes 1, 2 and 3 Emissions?
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In this article, we define what Scope 1, 2, and 3 emissions are and their significance in managing a company's carbon footprint.
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Decarbonization: meaning, technology and goals
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Since the Paris Agreement's adoption in 2015, decarbonization has become a crucial priority for nations, regions, and businesses globally. The ambitious goal is to decouple economic growth from greenhouse gas (GHG) emissions, making substantial progress toward sustainable development.
Yet, a pressing question remains: Are these efforts advancing quickly enough to keep global warming within safe limits?
👉 In this article, we delve into the importance of decarbonizing our societies and outline actionable steps companies can take today to embark on their net-zero journey.
What does decarbonization mean?
Decarbonization refers to the strategic reduction of human-induced carbon dioxide (CO2) emissions to counteract climate change and transition to a low carbon future. This requires a global transition from oil, coal, and gas to renewable energy sources.
💡 According to McKinsey, energy consumption is the primary source of CO2 emissions, responsible for 83% of global emissions. Each year, over 34 billion metric tons of CO2 are emitted into the atmosphere.
Decarbonization is crucial for several reasons:
- Climate stability - CO2 is a major greenhouse gas driving global warming. Reducing emissions is essential to limit temperature rises and avoid severe climate impacts.
- Health benefits - Lowering emissions improves air quality, reducing respiratory and cardiovascular diseases.
- Economic stability - Transitioning to renewable energy can create jobs, stimulate innovation, and reduce the economic risks associated with climate change.
To address these pressing issues, the international community has taken significant steps. In 2015, 195 countries adopted the Paris Agreement, aiming to limit global temperature increases to below 2°C above pre-industrial levels by 2100. However, a report by the UN IPCC in 2018 recommended an even more ambitious target of 1.5°C to mitigate the significant risks posed by a 2°C increase. This ambitious goal requires reducing global emissions by 45% by 2030 and achieving net zero by 2050, implying an annual reduction of approximately 7.6%.
Despite these targets, decarbonization remains a significant challenge. The 2021 UNEP Emissions Gap Report highlights a sobering reality: current pledges and policies set us on a trajectory for a 2.7°C temperature rise by the century's end. Transitioning to a fossil-free economy is achievable but requires robust societal and political commitment. However, only 45% of FTSE companies have committed to net-zero emissions by 2050, and 84% of these lack concrete plans to meet their targets. This underscores the urgent need for comprehensive and actionable strategies to ensure a sustainable future.
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Where do emissions come from?
Understanding the sources of carbon emissions is crucial for effective decarbonization. In 2022, global CO2 emissions originated from various sectors:
- Energy use in industry (24.2%): Industries consume large amounts of energy, primarily from fossil fuels, for manufacturing and production processes, leading to significant CO2 emissions.
- Transport (16.2%): The transport sector relies heavily on gasoline and diesel, emitting substantial CO2 through vehicle exhausts.
- Energy use in buildings (17.5%): Residential and commercial buildings use energy for heating, cooling, and electricity, contributing to emissions.
- Fuel combustion (7.8%): Direct burning of fossil fuels for energy in various applications, including power plants and residential heating.
- Fugitive emissions from energy production (5.8%): Leaks and other unintended emissions during the extraction, processing, and transportation of fossil fuels.
- Energy use in agriculture (1.7%): Agricultural practices, including the use of machinery and irrigation systems, consume energy and emit CO2.
- Direct industrial processes (5.2%): Emissions from chemical reactions in industrial processes, such as cement and steel production.
- Waste (3.2%): Decomposition of organic waste in landfills produces CO2 and methane.
- Agriculture, forestry, and land use (18.4%): Deforestation, land-use changes, and agricultural activities release CO2 stored in plants and soil.
The link between sectors and emissions
Each sector's activities are linked to carbon emissions due to their reliance on fossil fuels and energy-intensive processes. Reducing emissions requires a multifaceted approach, targeting energy efficiency, transitioning to renewable energy sources, and adopting sustainable practices across all sectors.
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Why do we need to decarbonize?
The trajectory of climate change poses not just a dire environmental threat but also a severe economic challenge. It endangers millions of lives, billions of homes, and jeopardizes trillions of dollars in global economic value. Continuing our reliance on fossil fuels without a robust drive towards decarbonization is not only ethically questionable but also economically unsustainable.
Economic costs
The economic cost of climate change is startling. According to Moody's, the current warming projections based on existing country pledges could result in costs of up to $54 trillion. If these pledges are not met, costs could skyrocket to $69 trillion. A low carbon economy is the most cost-effective path forward.
Human Impact
The 2022 IPCC report on Adaptation highlights that nearly 40% of the world's population is susceptible to climate change risks. This translates to billions of people facing increased frequencies of floods, storms, droughts, and heat waves without swift decarbonization.
💡 Between 2010 and 2020, those living in Africa, South Asia, and Central and South America suffered 15 times more deaths from climate-related disasters than in other parts of the world. The World Health Organization predicts an additional 250,000 deaths annually between 2030 and 2050 if efforts to reduce emissions fail, due to heat stress, malnutrition, and other health challenges.
Environmental Consequences
Sea level rise poses another significant threat, with a potential displacement of 10 million people for every 10-centimetre increase in coastal water levels. The difference between a 1.5°C and 2°C rise in global temperatures could result in a sea level surge of 48 to 56 centimeters.
Heavy rainfall events are now 30% more likely to occur every decade compared to pre-industrial times. This probability increases to 50% at 1.5°C warming and jumps to 70% at 2°C, leading to water scarcity, poverty, rapid species extinction, supply chain disruptions, and systemic economic risks.
👉 These figures underscore the significant repercussions of each half-degree temperature rise and highlight that the cost of inaction far exceeds that of action.
The silver lining? There are known, viable solutions to mitigate these impacts. It's time to take the initiative and realize their enormous benefits.
What is needed to achieve decarbonization?
“ Transitioning to a low carbon future requires a coordinated technological and infrastructural shift unlike any we've ever seen. Similar to the Industrial Revolution, all sectors of society will be impacted. ”
Industry
Industrial operations are known for their high energy dependency. Mining, oil production, chemical manufacturing, and the production of cement and steel, require vast amounts of heat for processes like metal smelting, compound blending, and resource extraction. In 2022, the industrial sector accounted for 37% of global energy consumption, much of which came from carbon-rich fossil fuels.
Coal is a primary energy source for these industrial activities, contributing to approximately 36% of the world's total energy generation. However, this reliance on coal conflicts with global ambitions to achieve net-zero emissions. For a sustainable future, coal's contribution to energy generation needs a dramatic reduction – it must drop by about 55% by 2030 from its 2022 levels, limiting it to powering no more than 12% of global energy needs.
Technological innovations:
Decarbonizing industrial heating processes involves transitioning from coal-centric methods to viable alternatives such as:
- Biomass: Renewable organic materials used as fuel.
- Green Hydrogen: Produced using clean energy sources.
- Natural Gas: A cleaner fossil fuel alternative.
- Electrification: Using electric technologies for industrial processes.
Carbon Capture and Storage (CCS):
Innovations like carbon capture and storage (CCS) technologies offer a viable strategy to sequester or eliminate stubborn emissions and achieve carbon neutrality. CCUS can capture up to 90% of CO2 emissions produced from the use of oil, coal, and gas in electricity generation and industrial processes, preventing CO2 from entering the atmosphere.
Electricity and heat production
The majority of electricity generated to power our appliances, lighting, digital technologies, and heating systems is derived from fossil fuel energy sources, including oil, natural gas, and coal. Over 40% of carbon dioxide emissions related to energy usage can be attributed to burning fossil fuels for electricity generation.
Energy transition
Encouragingly, recent data indicates that a substantial 39% of global electricity generation comes from renewable and nuclear energy sources. Solar energy, in particular, has been growing at a remarkable pace. In 2022, solar energy contributed to 12% of global energy supplies, an increase from 10% the previous year.
Electrification and energy system efficiency
Electrification, combined with enhanced energy efficiency measures, is widely regarded as a promising approach to reduce the carbon footprint of lighting, appliances, and heating systems. One example is the replacement of natural gas furnaces with air-source heat pumps (ASHPs) and electric heat pumps for power generation, which can substantially reduce CO2 emissions from heating. When powered by renewable energy sources, ASHPs offer amplified environmental benefits.
The role of electrification
Electrification of the power sector is crucial for reducing emissions in the electricity and heat production sector. Transitioning to electric systems powered by renewable energy not only reduces reliance on fossil fuels but also enhances overall energy efficiency. This shift is essential for achieving global decarbonization goals.
Transportation
The transportation sector contributes around 24% of global carbon dioxide emissions, with the majority produced by cars, buses, and trucks.
Ground transportation solutions
Effective solutions for ground transportation are within reach. Electric vehicles (EVs), hydrogen fuel cell vehicles, and biofuels offer promising pathways for transitioning the transportation sector toward lower emissions. Additionally, optimizing efficiency by reducing trip lengths and minimizing commutes can further decrease emissions from this sector.
Electric vehicles (EVs)
Embracing EV technology provides numerous benefits. As more variable forms of energy generation such as wind and solar become prevalent, battery storage will be critical to ensure energy availability at all times. EVs come equipped with batteries in their motors, and their chargers also contribute to energy storage. In a well-designed system, the battery resources of EVs could help store and distribute power from intermittent sources.
For EVs to realize their full potential in reducing CO2 emissions, they must be charged using renewable energy sources. This integration ensures that the reduction in emissions is maximized.
Alternative fuels for air and shipping sectors
While ground transportation has clear solutions, alternative fuels are essential for reducing emissions in the aviation and shipping sectors. Biofuels, synthetic fuels, and hydrogen are being developed and tested for these purposes.
The role of policy and infrastructure
Policy measures and infrastructure development are crucial to support the transition. Governments must implement incentives for adopting low-emission vehicles, invest in charging infrastructure, and promote research and development in alternative fuels.
Agriculture
The agricultural sector accounts for a significant portion of global greenhouse gas emissions, approximately 24%, with substantial contributions from methane (38%) and nitrous oxide (79%) emissions. This sector encompasses energy use in farming, livestock raising, and fishing.
Transition to cleaner fuel alternatives
Just as in transportation and industry, large agricultural machinery must transition to cleaner fuel alternatives. Shifting from diesel-powered equipment to electric or biofuel-powered machinery can significantly reduce emissions.
Regenerative agricultural practices
Embracing regenerative agricultural practices and rejuvenating fields can transform vast agricultural land into valuable carbon sinks. Regenerative agriculture includes practices such as:
- Cover cropping - Planting cover crops to improve soil health and sequester carbon.
- No-till farming - Reducing soil disturbance to maintain organic matter and enhance carbon sequestration.
- Agroforestry - Integrating trees and shrubs into agricultural landscapes to sequester carbon and improve biodiversity.
Importance of carbon sequestration
Agricultural lands cover approximately three-quarters of the world's land area, presenting a significant opportunity for carbon sequestration. Implementing these practices can help offset emissions from other sectors and contribute to overall climate goals.
Forestry and land use change
Land use changes currently contribute to a significant percentage of global emissions - 13% of global CO2 emissions and 5% of global methane emissions. These emissions often arise from deforestation for agricultural expansion or urban development.
Deforestation and emissions
Deforestation is a major driver of emissions, as trees that store carbon are cut down, releasing CO2 into the atmosphere. Brazil and Indonesia, home to some of the world's most carbon-rich rainforests, are among the top emitters due to land use alterations. Protecting these essential ecosystems is imperative to prevent reaching thresholds where carbon-absorbing regions shift into carbon-emitting areas.
Importance of forest conservation
Forests play a crucial role in mitigating climate change by absorbing CO2 from the atmosphere. Preserving and restoring forests can significantly reduce global emissions. Effective strategies include:
- Reforestation - Planting trees on deforested land to absorb CO2.
- Afforestation - Establishing forests on land that has not been previously forested.
- Sustainable forest management - Implementing practices that allow for resource use while maintaining the forest's health and carbon sequestration capabilities.
Policy and international cooperation
International cooperation and policy measures are essential to combat deforestation and land use change. Agreements such as the UN's REDD+ (Reducing Emissions from Deforestation and Forest Degradation) program incentivise developing countries to reduce emissions from deforestation and invest in low-carbon development.
Waste management
Waste management practices are significant contributors to global methane and nitrous oxide (N2O) emissions. These emissions arise from decomposing organic waste and incineration processes, making the waste sector a notable player in global warming.
Emissions from waste
Methane emissions from landfills and N2O emissions from waste incineration contribute significantly to global greenhouse gas emissions. Organic waste decomposition in landfills produces methane, a potent greenhouse gas, while incineration processes release N2O, contributing to climate change.
The life cycle of products
The challenge with waste begins much earlier, during a product's life cycle. Emphasizing product design and waste systems that prioritize reuse, recyclability, and durability is crucial for mitigating both consumption and production-based emissions. Effective strategies include:
- Design for recyclability - Creating products that can be easily disassembled and recycled.
- Extended producer responsibility (EPR) - Holding manufacturers accountable for the entire lifecycle of their products, including disposal.
- Circular economy practices - Promoting systems where products are reused, refurbished, and recycled, reducing the need for raw materials and minimizing waste.
Integrated waste management
Implementing integrated waste management practices can significantly reduce emissions. These practices include:
- Waste segregation - Separating organic waste from recyclables to reduce landfill methane emissions.
- Composting - Turning organic waste into valuable compost instead of sending it to landfills.
- Advanced recycling technologies - Utilising technologies that enhance the efficiency and effectiveness of recycling processes.
Policy and community action
Policy measures and community engagement are essential to drive change in waste management. Governments can implement regulations and incentives to promote waste reduction and recycling, while community programs can raise awareness and encourage sustainable waste practices.
Decarbonization in the United States
The United States has set ambitious targets for decarbonisation, with the Biden administration aiming for a net-zero greenhouse gas emissions economy by 2050. The U.S. has rejoined the Paris Agreement and committed to reducing emissions by 50-52% below 2005 levels by 2030. Significant investments are being made in renewable energy, with substantial growth in wind, solar, and battery storage capacities. The U.S. is also focusing on modernizing the electric grid to support the integration of these renewable sources and improve energy efficiency across various sectors.
Transportation is a major focus area for reducing emissions, as it accounts for the largest share of U.S. greenhouse gas emissions. The administration has set a target for 50% of all new vehicle sales to be electric by 2030 and has invested in expanding the EV charging infrastructure nationwide. Additionally, efforts are being made to decarbonise the industrial sector through the development of green hydrogen, carbon capture, and storage (CCS) technologies. The U.S. government is also incentivizing clean energy investments and supporting state and local initiatives to drive the transition towards a low-carbon economy.
How to decarbonize your company
Businesses play a crucial role in global decarbonization efforts. According to the Carbon Majors Database, just 57 companies are responsible for 80% of the world's greenhouse gas emissions. This highlights the significant impact that corporate actions can have on global emissions. By implementing effective decarbonization strategies, businesses can significantly reduce their carbon footprint and contribute to global efforts to combat climate change.
These tips will help your business embark on the path to net zero:
| Tip | Description |
|---|---|
| Assess your company's carbon footprint | Understanding your company's environmental impact is pivotal. Before you can strategize for a greener future, it's essential to gauge your current CO2 emissions. Accurate determination of CO2 emissions can be challenging without the right tools and expertise. 👉 At Greenly, we specialize in carbon footprint assessments, so why not get in touch to see how we can help your company track and reduce its carbon footprint. |
| Establish clear goals and performance metrics | After assessing your carbon footprint, the next step is to define tailored objectives and key performance indicators (KPIs) to guide your emissions reduction efforts over time. Setting specific, measurable, achievable, relevant, and time-bound (SMART) goals is crucial for tracking progress and ensuring accountability. Crafting these specific targets is an essential step in the decarbonization journey. |
| Embrace decarbonization as a business advantage | Decarbonization is reshaping the business landscape. Forward-thinking companies understand that early investments in decarbonization can yield significant long-term benefits. Robust decarbonization strategies today will pave the way for economic resilience and a sustainable business environment for years to come. By championing decarbonization, your business won't just be mitigating climate risks. You'll be positioning yourself to capture ESG investments, gain a competitive edge, tap into emerging markets, and earn the respect and support of key stakeholders. |
| Engage and empower your employees | Building employee understanding and commitment to decarbonization is crucial for achieving your business's sustainability goals. By actively engaging your team in your decarbonization strategy, you're not only fostering a unified approach but also tapping into their collective energy and innovative ideas. A shared vision for a sustainable future can drive meaningful partnerships, sustain momentum toward your objectives, and foster a culture of positive change. Successful organizational change hinges on effective management and communication. Keep your employees informed, provide opportunities for them to contribute, and offer incentives to encourage their active participation in your decarbonization journey. This approach can turn potential uncertainty into a collaborative and empowering experience for all. |
How can Greenly help you decarbonize?
Reducing carbon emissions doesn't have to be difficult. Greenly offers a comprehensive suite of services to help your company embark on and sustain its decarbonization journey. Our tailored solutions are designed to accurately measure your greenhouse gas (GHG) emissions, identify and mitigate high-emission activities, and provide transparency to your customers and stakeholders.
Start your climate journey by measuring your GHG emissions
Understanding your company’s carbon footprint is the first step in decarbonization. Greenly can help you to:
- Calculate your Scope 1, 2, and 3 emissions - Use our advanced tools to measure your direct and indirect emissions across all scopes.
- Build custom action plans - Develop and implement strategies to reduce carbon emissions with the support of our climate expert team. We provide the expertise and guidance necessary to achieve meaningful reductions.
Identify unsustainable suppliers and replace them with less carbon-intensive solutions
Scope 3 emissions, which include all indirect greenhouse gas emissions produced by your company's value chain, often represent up to 90% of your total emissions. Greenly can help you:
- Analyse your scope 3 emissions - Gain a detailed understanding of your supply chain emissions.
- Improve transparency - Enhance your Corporate Social Responsibility (CSR) communication by clearly reporting on your scope 3 emissions and the actions taken to reduce them.
- Replace wasteful suppliers - Identify suppliers with high carbon footprints and transition to more sustainable options, reducing overall emissions.
Understand your product’s full impact with life cycle assessment
A Life Cycle Assessment (LCA) evaluates the environmental impact of your products from production to disposal. Greenly’s LCA services provide:
- Competitive edge and transparency - Conduct thorough assessments to provide your customers with clear, transparent information about the environmental impact of your products.
- Detailed insights - Understand the full environmental footprint of your products and identify areas for improvement to enhance sustainability.
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